The Marker, Hadar Horesh, 15.03.2020
The Corona crisis has caught the construction industry in the midst of a boom in demand and sales. This is according to data published by the Central Bureau of Statistics on the housing market in November-January.The data, of course, do not reflect the current situation in the housing market, which in recent days has experienced a slowdown, as most sectors of the economy.
The figures show that the number of new dwellings sold and built by the tenants (self-construction of private homes and purchase groups) amounted to 14,320 apartments, a 22% increase over the previous three months and a seasonal reduction - a 10% increase. The sale of the new apartments amounted to 9,790 apartments, a 25% increase and a seasonally adjusted increase of 7.3%. The upward trend in house sales and self-building has been on a regular basis since March 2018 and the average monthly rate of new home sales is 2.6%.
Positive, though slightly different, data also emerges from a review of the transactions reported to the tax authority. According to the authority's figures, in November 2019-January 2020, 10,420 new apartments were sold, an increase of 14.7% compared to the previous three months (August-October 2019).
The main housing market is the central area. In the Tel Aviv and Central Districts, 5,166 apartments were sold, 53% of all apartments sold according to CBS data. In the Southern District, 1,750 apartments were sold - about 18% of the total market and 1,166 apartments in the Jerusalem District - about 12%.
The city where the largest number of apartments was sold was Ramat Gan, with 936 apartments, most of which were built as part of the city's renewal.Ramat Gan is also showing an impressive 265% jump over the previous three months, despite the mayor's declaration against the new construction as part of the urban renewal. Jerusalem in second place with 570 apartments and Tel Aviv only in third place with 500 apartments.In Harish, which is usually one of the leading cities in the sale of new apartments, the newest decline in sales was recorded. In the past November to January only 178 apartments were sold in Harish, a decrease of 46% compared to the previous three months.
Despite the continuing upward trend in sales, contractors maintain a steady inventory of unfurnished apartments.The number of unsold dwellings even decreased slightly to 37,970 at the end of January, compared to 38,960 at the end of December 2019. Estimated inventory speed (time of sale of all inventory at current sale rate) was 12.6 months.
The steady inventory of unfurnished apartments may help the construction industry withstand a continuing crisis of sales decline. However, it's worth noting that "CPC" programs slightly distort the picture. The winners of the program sweepstakes will buy the apartments they purchased with great certainty, even though the purchase is actually registered only after signing the contract.This guarantees to contractors that the apartments under the plan, which constitute about half of the new housing market, will be sold at a relatively high rate than free market apartments.However, it is impossible to rule out that a significant portion of the price-per-user credentials, which have become job insecure as a result of the crisis, will not realize the winning. In this case, the right to come to the lottery will pass, if there are any.